The consequences of negative public relations, criminal or ethics violations or corporate malfeasance often extend far beyond the bad actors themselves. The “crisis du jour” in the financial industry centered on Wells Fargo’s misdeeds has clearly harmed lower level employees, shareholders, and unwitting customers.
Wells Fargo CEO John Stumpf’s feet are currently being held to the fire of a Senate Banking Committee, and the possibility of further legal action by the Department of Justice and the Securities & Exchange Commission still lurks. (Although some would say that withstanding Elizabeth Warren’s wrath may be just as scary.)
What are corporate partners, associates or benefactors to do when faced with the risk of guilt by association?
Some might argue that isolated acts allegedly perpetrated by a corporation do not negate the legitimate goodwill they create and sustain in other areas. Many financial organizations, for example, sponsor nonprofit organizations and engage in many philanthropic endeavors. Who is served by unwinding such valuable contributions? Why go looking for conflicts by drawing further attention to the controversy? And why risk losing the hard-won momentum of the sponsorship dollars, volunteer efforts, and community engagement?
A case could certainly be made in favor of this option; however, it’s critical to make this an affirmative approach rather than a decision of default.
Condemn Bad Acts While Acknowledging the “Good in Balance” – Valued Partnership Over Time
Surely, an extremely delicate balance and careful presentation must be sought in this situation. Yet the inherent honesty of this position may shine as the most forthright and transparent.
- Start with frank acknowledgement of current challenges, i.e.,
“Many of you may be aware that our partner X has been in the news regarding Y…..”
- Make a statement – as neutrally as possible – about how the alleged actions are not condoned and do not reflect either your values or the ones you generally associate with this valued business partner.
- Express confidence that continued association is warranted and serves the greater good.
Gracefully Sever Ties
Should the misdeeds of a corporate partner or the potential reputational risk rise to such a level as to be abhorrent to your organization, no amount of spin – no matter how well orchestrated – can whitewash it. At such a time, the only decision to be made is how or whether to make an announcement or let things fall away in silence. Even then, a carefully crafted message to your key internal stakeholders may be warranted.
Bad press has tarnished the images of many big corporations following a scandal as outlined in this article in The Atlantic discussing “The Flame Index;” Volkswagon’s fuel efficiency claims, BP’s oil spill, and Johnson & Johnson’s product recalls come to mind. But the effects further down the chain must be considered as well. The Public Relations Society of America (PRSA) offers instructive ethical guidance along with illustrative case studies to help weigh potential impacts and determine strategies. Ultimately, however, decision-making must involve both strategic assessment of external considerations along with a look in the proverbial mirror: which lines have been crossed and can your organization live with them? How have you dealt with these challenges, and what lessons can be shared?